Office Alpha_3Q 2019_vFinal

OFFICE ALPHA LIQUID INVESTMENT FIRM OCCUPANCY REPORT NEW YORK | 3Q 2019

CONTENTS

Evolution of a Liquid Investment Firm

1

Competitive Landscape

3

Most Notable Transaction of 3Q 2019

5

Office Market Snapshot

7

In the Spotlight

9

Important Credit Considerations

11

EVOLUTION OF A LIQUID INVESTMENT FIRM A startup fund is a unique specimen. From incubator space to an established headquarters, these occupiers have an evolutionary pattern all their own.

PHASE 1 COWORKING/SHARED/INCUBATOR

SIZE OF SPACE

500–3,000 sf

Keep costs low, important to recruit initial team, maintain startup feel, build camaraderie

STRATEGY

OFFICE TYPE

Coworking, shared or incubator

Month-to-month, license agreement or 1-2 year deals

TERMS

UP FRONT COSTS

None or minimal

Minimal: 1–3 months cash security deposit; letter of credit may be required for 2+ year commitments

SECURITIZATION

ADVANTAGES

Flexibility, focus, freedom

CHALLENGES

Security, cost, branding

1 | Office Alpha

PHASE 2 FIRST OFFICE

PHASE 3 ESTABLISHED HEADQUARTERS

3,000–10,000 sf

10,000–50,000+ sf

Top-of-the-line installation, amenities and infrastructure creates an ability to attract and retain human capital

Alignment of business objectives with anticipated growth

Leased office: direct or sublet

Leased office: direct

2–5 years

5–15 years

Modest to maximum: IT/HVAC infrastructure, work allowance shared between tenant and landlord, FF&E

Minimal to modest: depending on CAPEX and FF&E

Moderate: 4–6 month letter of credit; good guy guarantee may be required; favorable burn down

Moderate: 6–12 month letter of credit; good guy guarantee typically required

Global identity, well established, leverage with ownership

Autonomy, shorter term, identity

Increased occupancy costs, sublandlord solvency, configuration

Significant real estate expense, exit strategy in the event of disposition

Cushman & Wakefield | 2

SELECT LIST OF LARGEST FUNDS BASED ON AUM COMPETITIVE LANDSCAPE

45) 767 Third Avenue

21) 610 Broadway

1) 452 Fifth Avenue Man Group

Rubric Capital Management

Anchorage Capital Group

Tilden Park Capital Management Varadero Capital

46) 330 Madison Avenue

22) 500 Park Avenue Magnetar Capital Samlyn Capital Caxton Associates 23) 300 Park Avenue

HG Vora Capital Management

2) 880 Third Avenue

47) 250 West 55th Street Soros Fund Management

Renaissance Technologies 3) 100 Avenue of the Americas Two Sigma Investments 4) 101 Avenue of the Americas Two Sigma Investments 5) 399 Park Avenue Millennium Management Brigade Capital Management 6) 40 West 57th Street Elliott Management

Sachem Head Capital Management Warlander Asset Management Squarepoint Capital Management

GoldenTree Asset Management

24) One Bryant Park

SRS Investment Management Marathon Asset Management

48) 499 Park Avenue

Empyrean Capital Partners Cantillion Capital Management

25) 245 Park Avenue

Angelo, Gordon & Co. 26) 1370 Avenue of the Americas Pharo Management Canyon Partners 27) 1 Penn Plaza SECOR Capital Advisors 28) 510 Madison Avenue Senator Investment Group Varde Partners 400 Capital Management Stone Ridge Asset Management Chieftain Capital Management

49) 535 Madison Avenue Garda Capital Partners

Gotham Asset Management Aurelius Capital Management Melvin Capital Management Monarch Alternative Capital

PointState Capital Management Highbridge Capital Management

7) 350 Park Avenue Marshall Wace 8) 520 Madison Avenue

50) One Rockefeller Plaza

Highline Capital Management

51) 11 Times Square Kepos Capital

Davidson Kempner Capital Management Element Capital Management TIG Advisors Axonic Capital Management

Moore Capital Management SIR Capital Management 52) 1095 Avenue of the Americas Pine River Capital Management 53) 600 Lexington Avenue LibreMax Capital

29) 375 Park Avenue Carlson Capital EnTrustPermal 30) 101 Park Avenue

9) 425 Park Avenue Citadel 10) 50 Hudson Yards BlackRock 11) 1166 Avenue of the Americas D. E. Shaw Group 12) 315 Park Avenue South Winton Capital Management* 13) 280 Park Avenue Viking Global Investors

MKP Capital Management KCL Capital Management

Tiger Global Management Hound Partners

54) 777 Third Avenue

31) 787 Eleventh Avenue Pershing Square 32) 650 Fifth Avenue Systematica Investments WorldQuant 33) 590 Madison Avenue Brevan Howard DW Partners 34) 1251 Avenue of the Americas Waterfall Asset Management 35) 1350 Avenue of the Americas Cheyne Capital 36) 450 Park Avenue Steadfast Capital Management Harbinger Capital Junto Capital Management 37) 410 Park Avenue

Hudson Bay Capital Management Medalist Partners

55) 475 Fifth Avenue

Ionic Capital Management

BlueMountain Capital Management Napier Park Global Capital Trian Partners Taconic Capital Advisors

56) 527 Madison Avenue Long Pond Capital SkyBridge Capital 57) 500 Fifth Avenue

MIDTOWN SOU

DOWNTOWN

14) 152 West 57th Street CQS

Hildene Capital Management 58) 1177 Avenue of the Americas Seer Capital Management 59) 15 East 26th Street Holocene Advisors 60) 126 East 56th Street Quest Partners 61) 780 Third Avenue Tricadia Capital Management 62) 405 Lexington Avenue Saba Capital Management 63) 888 Seventh Avenue Tourbillon Capital Partners Wildcat Capital Management

Kingdon Capital Management Haidar Capital Management 15) 1270 Avenue of the Americas TCI Fund Management 16) 299 Park Avenue King Street Capital Management Bardin Hill Asset Management

17) 1633 Broadway PIMCO 18) 767 Fifth Avenue

Solus Alternative Asset Management

38) 1745 Broadway PDT Partners 39) 7 World Trade Center

York Capital Management Perella Weinberg Partners Glenview Capital Management Maverick Capital Reservoir Capital Management Icahn Enterprises

Capstone Investment Advisors

40) 800 Third Avenue

64) 12 East 49th Street

Graticule Asset Management

Argentem Creek Partners Brave Warrior Advisors

41) 140 East 45th Street Greenlight Capital 42) 660 Madison Avenue Birch Grove Capital 43) 65 East 55th Street Eminence Capital ExodusPoint 44) 90 Park Avenue Autonomy Capital

19) 9 West 57th Street

Church St

65) 666 Fifth Avenue

Sculptor Management* D1 Capital Partners Coatue Management

Atlantic Investment Management

66) 51 Astor Place

Tudor Investment Corporation Perceptive Advisors Maplelane Capital

20) 55 Hudson Yards Third Point

Point72 Asset Management Engineers Gate Centiva Capital Nokota Capital Management Arosa Capital Management Healthcor Management

67) 7 Times Square

Bridger Capital Management Tenaron Capital Management Abdiel Capital Management

TimesSquare Capital Management

South St

*Space on the market for sublease

3 | Office Alpha

W 72 St

Broadway

MIDTOWN

Central Park West

W 57 St

Fifth Ave

W 50 St

MIDTO

Eighth Ave

W 42 St

Eleventh Ave

MIDTOWN MIDTOWN SOUTH

Park Ave

W 34 St

Ninth Ave

Fifth Ave

Tenth Ave

Seventh Ave

Third Ave

Sixth Ave

W 23 St

Madison Ave

Lexington Ave

Eighth Ave

W 14 St

MIDTOWN MIDTOWN SOUTH

First Ave

Third Ave

Fifth Ave

OUTH

Houston St

Canal St

Delancey

Bowery

Broadway

rch St

E Broadway

MIDTOWN SOUTH DOWNTOWN

th St

Cushman & Wakefield | 4

MOST NOTABLE TRANSACTION OF 3Q 2019

Brevet Capital Management 441 Ninth Avenue Cove Property Group (Cove) purchased 441 Ninth Avenue from owner-occupier EmblemHealth in 2016 with an elaborate renovation plan to build an 18-story glass and steel superstructure atop the existing eight- floor building. After purchasing additional air rights, Cove completed the 420-foot extension without adding a single column to the existing structure. The owner looked to build upon the asset’s historical roots as an industrial factory while ensuring that the renovation would stand the test of time. BrevetCapitalManagement (BrevetCapital), a traditional Plaza District occupier, shocked the market with its lease at 441 Ninth Avenue. The firm grew more than twice its existing footprint at 230 Park Avenue when it elected to lease 16,178 sf on the 20th floor of the new tower. Brevet Capital will benefit from all of the perks of new construction, including high ceilings, abundant natural light, state-of-the-art heating and cooling systems and outdoor space. “The open floor plan, abundant light and air, and industrial details will allow us to deepen our culture of collaboration and cross-pollinating information to createdynamicfinancial solutionsandpartnerships.” - DougMonticciolo, CEO, Brevet Capital Brevet Capital is one of many financial services firms looking to the Far West Side for new offices. Its neighbors will include Point72 Asset Management, Third Point Management, Nokota Management, Arosa Capital Management, and Engineers Gate.

5 | Office Alpha

Cushman & Wakefield | 76

OFFICE MARKET SNAPSHOT

At the time of publication, Cushman & Wakefield’s research team tracked 14 liquid investment firm transactions this quarter. The breakdown is below: Midtown Ten leases were executed, accounting for 201,171 sf. The average taking rent was $105.65 psf, a 19.3% increase from last quarter. Concessions for new leases averaged seven months of free rent and $80.00 psf in tenant improvement allowance. Midtown South Four leases were executed averaging $133.25 psf, a marginal increase in leasing activity compared to last quarter when three transactions occurred.

CENTIVA C 55 Hudso Partial 22n 16,00

MIDTOWN MIDTOWN SOUTH

UNTITLED INVESTMENTS 412 West 15th Street Entire 12th floor 6,092 sf

W 23 St

Eighth A

W 14 St

RTW FUNDS 40 Tenth Avenue Entire 7th floor 14,082 sf

Downtown No new lease transactions were tracked.

MIDTOWN SOUTH

DOWNTOWN

Houston St

New Launch Relocation Expansion Renewal

Canal St

Bowery

Broadway

*Financial terms and conditions of these transactions are kept in strictest confidence.

Church St

7 | Office Alpha

South St

Broadwa

MIDTOWN

Madison Ave

Central Park West

SQUAREPOINT CAPITAL 250 West 55th Street Entire 38th floor 24,265 sf

W 57 St

YORK CAPITAL 767 Fifth Avenue Entire 17th, Partial 21st floors 55,430 sf

Fifth Ave

Third Ave

W 50 St PDT PARTNERS 1745 Broadway Entire 24th–25th floors 53,490 sf

BIRCH GROVE CAPITAL 660 Madison Avenue Partial 15th floor 8,320 sf

MIDTOWN

Eighth Ave

IVA CAPITAL udson Yards al 22nd floor 16,007 sf

Eleventh Ave BREVET CAPITAL MANAGEMENT 441 Ninth Avenue Entire 20th floor 16,178 sf

W 42 St

ATLANTIC INVESTMENT MANAGEMENT 1301 Ave. of the Americas Partial 38th floor 7,305 sf

CANYON PARTNERS 1370 Ave. of the Americas Entire 30th floor 10,776 sf

Park Ave

W 34 St

Ninth Ave

MANA PARTNERS 600 Fifth Avenue Partial 2nd floor 2,600 sf

CHALKSTREAM CAPITAL GROUP 444 Madison Avenue Entire 22nd floor 7,208 sf

Fifth Ave

Tenth Ave

ECHO STREET CAPITAL 12 East 49th Street Entire 44th floor 16,200 sf

Seventh Ave

Third Ave

Sixth Ave

3 St

Madison Ave

Lexington Ave

hth Ave

TOLIS ADVISORS 809 Broadway Entire 8th floor 2,508 sf

MIDTOWN MIDTOWN SOUTH

First Ave

Third Ave

Fifth Ave

Delancey

E Broadway

MIDTOWN SOUTH DOWNTOWN

Cushman & Wakefield | 8

IN THE SPOTLIGHT

NEW DEVELOPMENT

The Six | 106 West 56th Street Savanna Real Estate Fund The Six, Savanna Real Estate Fund’s 26-story new office development, caters specifically to boutique financial tenants. The building is expected to deliver in January 2020. Surrounded by New York landmarks such as Carnegie Hall and Central Park, the 90,000-sf building’s design includes 13’6” ceiling heights, column-free floor plates, numerous terraces, and floor-to-ceiling windows that frame spectacular Central Park views. Given the limited number and stature of its tenancy, The Six will offer smaller tenants an exclusive and bespoke office product unlike anything else in New York City. Asking rents range from $105.00/sf on base floors to $150.00 psf on the tower floors.

Total Building Size: 90,000 sf Typical Floor Size: 2,500–4,500 sf Delivery: January 2020 Asking Rent: $105.00–$150.00/sf

SAMPLE TEST-FITS

BASE

2 ND —6 TH FLOOR

4,508 RSF

COLUMN-FREE FLOOR PLATE

10-FOOT FINISHED CEILINGS

Sample Test-Fits

SAMPLE TEST-FITS

MIDRISE

3,037 RSF SAMPLE TEST-FITS

TOWER

14 TH —16 TH FLOOR

COLUMN-FREE FLOOR PLATE

17 TH —19 TH FLOOR 20 TH —24 TH FLOOR 25 TH —26 TH FLOOR

2,672 RSF 2,473 RSF 2,482 RSF

COLUMN-FREE FLOOR PLATE

10-FOOT FINISHED CEILINGS

10-FOOT FINISHED CEILINGS

Base

Mid-Rise

Tower

106 WEST 56TH STREET

THESIX56.COM

9 | Office Alpha

106 WEST 56TH STREET

THESIX56.COM

106 WEST 56TH STREET

THESIX56.COM

Cushman & Wakefield | 10

IMPORTANT CREDIT CONSIDERATIONS Key business drivers that owners evaluate when determining security deposit

• GP and LP diversification

• Fund/investment management contract structure

• Investment strategy

• AUM, fee and redemption restrictions

• Number of funds

• Fund performance history

• Number and nature of regulatory issues

Source: Tenant Risk Assessment

12 11 | Office Alpha

Cushman & Wakefield | 12

Jeffrey R. Lovell 212 841 5994 jeffrey.lovell@cushwake.com

William T. Yeatman 212 841 7681 will.yeatman@cushwake.com

Winston C. Schromm 212 841 7873 winston.schromm@cushwake.com

Copyright © 2019 Cushman & Wakefield. All rights reserved. The information contained within this report is gathered from multiple sources believed to be reliable. The information may contain errors or omissions and is presented without any warranty or representations as to its accuracy.